KULTAR EXPORTS Vs. COMMISSIONER OF CUSTOMS, NEW DELHI

JUDGEMENT

(1.) THE appellants are engaged in the business of export of ready -made garments and textiles. They purchase such items from traders and export them and claim drawback, of duties borne by inputs going into the manufacture of such items, at drawback rates notified by Ministry and commonly known as All Industry Rates. These rates have two components viz. that for customs duties and that for excise duties. During the period 2003 -2004 to 2006 -2007 they claimed both the components of such drawback on 369 Shipping Bills and the department sanctioned drawback including excise portion amounting to Rs. 1,43,15,400/ -. An amount of Rs. 6,40,759/ - is yet to be paid to the appellants and the balance is already paid. Revenue made out a case that they were not eligible for the excise portion of the drawback and they claimed such drawback on the basis of false declarations. A Show Cause Notice dated 18 -9 -2008 issued in this regard was adjudicated by the impugned order. The impugned order confirmed demand of drawback amounting to Rs. 1,43,15,400/ - held to be erroneously paid in terms of Section 75A(2) of the Customs Act, 1962. Aggrieved by the order the appellants have filed this appeal.

(2.) THE main case of the Revenue is that excise portion of duties paid on inputs used in goods manufactured is refunded through the Cenvat Credit Scheme and this component cannot be again refunded through drawback scheme and to avoid such double refund Government has prescribed a procedure that the exporters claiming excise portion should produce a certificate that Cenvat credit has not been availed on the goods exported. The case of the Revenue is that the appellant should have submitted certificates in forms Annexure -I or Annexure -II prescribed in Circular No. , dated 19 -10 -2001, but the appellant did not submit such certificates for any of the 369 consignments. The SCN further alleges that the CHA had declared that such certificates were attached to many of the shipping bills and thus there were mis -declarations in many shipping bills.

(3.) IN this context there are three types of exporters as under: -